Currency-backed stablecoins offer several advantages over algorithmic stablecoins:
Having a full reserve makes it possible to maintain a constant demand for the tokens. Knowing that you can always sell your tokens back at their current value.
They are highly liquid compared to exchange-traded algorithmic stablecoins. Currency-backed stablecoins can be issued and redeemed efficiently as funds are deposited/withdrawn from the reserve and tokens minted/burned accordingly.
They allow for zero slippage and spread when issuing/redeeming, regardless of size. Our goal is to find ways to reduce costs compared to the status quo, not increase them.